Lynn’s bond rating upgraded to ‘A’

LYNN – The city’s bond rating has been nudged up a half-grade from an A- to an A by Standard & Poor’s Ratings Services. According to the letter sent to city officials the upgrade is based on “strong financial performance and greater operating flexibility.””We are very pleased with the upgrade in bond rating, especially in the uncertain economic climate all cities and towns are facing,” said Mayor Judith Flanagan Kennedy. “We have worked hard the last two years to stabilize the budget and enhance the reserve fund, and this rating reflects positively on those efforts.”City Council President Timothy Phelan said the increase essentially means the city is a good short-term risk.”The city has had an excellent bond rating for the last seven, eight, nine, 10 years but any uptick is helpful,” he said.Chief Financial Officer Richard Fortucci called the increase incremental but a move in the right direction.”It’s a positive upswing in the bond rating primarily due to our level of reserves,” he said.The City is projecting a $3.4 million operating surplus for the 2012 fiscal year, which would mark the fourth consecutive year the city has ended the fiscal year in the black and it would increase the total general fund balance to $28.2 million, up from $10.6 million in 2008.Phelan said there are a lot of different factors that go into a bond rating. Standard & Poor’s attributed several of those factors as rationale for upgrading the city’s bond rating, including, strong per-capita market values despite declines in real estate evaluations, a record of sound budgeting and a low debt burden.The city spends only five percent of its operating expenses on debt service and of that debt service 91 percent is due to be retired by Fiscal 2020 and 100 percent by 2028.The letter from Standard & Poor’s states that its “stable outlook reflects our view that Lynn will maintain strong reserves and operating flexibility” and that it does not expect the rating to change within the next two years.Chris Stevens can be reached at [email protected].